Labour pledge to scrap business rates if elected says Shadow Chancellor
They promised to carry out 'the biggest overhaul of business tax in a generation'
During a speech to Labour's 2021 conference in Brighton, Shadow Chancellor Rachel Reeves said that the party would eventually scrap business rates after a gradual phase out.
She said to delegates:“The next Labour government will scrap business rates. We will carry out the biggest overhaul of business taxation in a generation, so our businesses can lead the pack, not watch opportunities go elsewhere.”
Labour’s business tax reform would look to shift the burden from the high street to online giants, and end the tax relief afforded to private schools due to their charitable status.
Ms Reeves insisted the whole system of business taxation is not “fair” or “fit for purpose”, adding: “How can it be when bricks-and-mortar, high street businesses are taxed more heavily than online giants? High street businesses pay over a third of business rates, despite making up only 15% of the overall economy.
Ms Reeves made the remarks as she called on the Government to increase the digital services tax to 12% for the next year, to make sure online companies like Amazon are paying their fair share.
The shadow chancellor also said the digital services tax rise would help the Government freeze business rates – a move that would give small and medium-sized businesses a discount next year.
She said: “Today we are calling on the Government to freeze business rates next year to increase the threshold for small business rates relief, giving small and medium-sized businesses in all sectors a discount next year.
“To pay for those measures, the Government should increase the digital services tax to 12% for the next year, to make sure online companies that have thrived during this pandemic are paying their fair share.”